9 Hidden Web3 Trends to Watch In 2023

Crypto and DeFi took a beating in 2022, but Web3 interest barely flinched — search demand has stayed within 30% of its all-time peak over the past year, a sign that builder and user attention hasn’t gone anywhere.

Top Web 3 Trend for 2023

The following is a list of nine Web3 trends that are presently gaining traction and will be part of the industry growth in 2023.

1. Social DeFi

Crypto, by definition, is anonymous; nevertheless, this does not imply that it should be anti-social. People have used nicknames to identify themselves online since the early days of the internet. Similarly, 0x… addresses are used in Web3 to identify bitcoin wallets.
Current addresses are frequently long, complex strings of letters and numbers that humans find difficult to recall and link with a certain person or firm.
Because there is no social connection between a raw 0x… address and a person's identity on the internet, a new branch of decentralized finance (DeFi) has emerged called "social DeFi."
The term "Social DeFi" refers to a group of programs and platforms that attempt to make it simpler for people to connect and interact with one another through the use of cryptocurrency. Some of the most important aspects of social DeFi are:

Customized 0x addresses: Apps such as DeBank and ENS enable users to convert their 0x addresses into something more human-readable, such as a username. This makes identifying and remembering each other's wallets easy.

Wallet follows + messaging wallet owners: Apps such as DeBank enable users to
message wallet owners or to follow individual wallets and receive notifications
about their activities. This, in my opinion, is a game-changing feature that opens
up a whole new world of social trade.

Dapp Notification: There are also some B2B solutions emerging, such as https://notifi.network/, that allow crypto projects to offer notifications for their dApp users.

Communities & social feeds: Platforms such as DeBank provide
social feeds and communities linked to specific wallets or initiatives. These
platforms enable users to stay up to date on the latest advancements in the
DeFi field and connect with others who share their interests.

DAO aggregators: Users can use apps like Zapper to find and
participate in decentralized autonomous organizations (DAOs), which are
decentralized, blockchain-based organizations that allow users to gather
together and make collective decisions about allocating funds or resources.

In 2023, will there be a globalization of social deFi?

Overall, social DeFi can connect people in previously unimaginable ways, as well as open up new avenues for collaboration and creativity in the cryptocurrency field.

The number of unique active wallets engaging with Social dApps climbed by more than 1250% in 2022, and it is expected to rise further in 2023 due to rising demand for web3 identities.

2. Insurance for DeFi/Crypto Risk

Investing in DeFi and cryptocurrencies can produce enormous gains, but it also has inherent risks such as hackers, vulnerabilities, rug pulls, and scams. Many investors are looking to insurance to limit these risks and protect their holdings, particularly in the aftermath of the LUNA and FTX catastrophes in 2022.

On platforms such as Insurace.io, Nexusmutual.io, or Neptunemutual,
you may protect your wallet against anything in DeFi, such as a protocol hack,
stablecoin de-peg, or the insolvency of a centralized exchange, for around
0.2-0.9%/month depending on the product type.

Forecast for DeFi/Crypto Insurance in 2023

As traditional investors seek further protection for their holdings, we should expect more capital to flow into DeFi and crypto risk insurance products in 2023.

Web3 insurance can shield you from the hazards that come with investing in decentralized finance (DeFi) and bitcoin. Demand for risk insurance solutions is projected to rise as traditional investors continue to adopt DeFi and crypto.

3. NFT Liquidity Tools

NFT liquidity has long been a problem in the Web3 environment. These assets are typically illiquid, making cash conversion difficult for owners.
However, some protocols, like Sudoswap, aim to alleviate this problem by creating pools where NFTs can be bought and sold quickly. Users would be able to simply switch their NFTs for something more liquid, such as floor space, if necessary.

OpenSea and Uniswap have recently bought NFT aggregator services, gem.xyz and Genie, respectively, which seek to harness Sudoswap's liquidity to support NFT trading. These efforts may boost the liquidity of the NFT market, making it more desirable to investors and collectors by making it easier to buy and sell NFTs. Overall, establishing liquidity solutions for NFTs is an important Web3 technique.

What Will Happen to NFT Liquidity Tools in 2023?

In 2023, liquidity tools will stabilize the NFT market, resulting in a better Web3 infrastructure for users and investors. Markets will become more liquid, and NFT prices will become more predictable.

An outstanding example from outside of crypto is Masterworks, which offers possibilities for common investors to own a fraction of pricey traditional art for a lesser cost by purchasing paintings and registering them with the SEC as IPOs (and selling shares of them for as little as $20).

4. Advance Trading Tool for DEX

The necessity for advanced trading capabilities, such as stop-loss functionality, has been one of the key impediments to the broad adoption of decentralized exchanges (DEXs).
However, some protocols, including dYdX, are striving to address this issue.

Overall, advances in enhanced DEX trading tools are a significant trend in the realm of Web3 that will aid in making DEXs more user-friendly and competitive with CEXs.

DEX Upgrades Coming in 2023

Following the demise of the centralized exchange FTX, other CEXs experienced massive outflows in favor of decentralized exchanges. As one of the more visible ongoing Web3 trends is the growing number of new DeFi users, it will be critical for DEXs to continue developing their UI/UX and offering advanced trading capabilities.

5. Rise of Move-to-Earn Apps

Move-to-earn, a trend in which users are rewarded with cryptocurrencies, non-fungible tokens, or points for exercising, is gaining traction and is anticipated to continue beyond 2023.

This novel exercise method has piqued the interest of Olympic sprinter Usain Bolt, who has teamed with the recently created Step App, which allows users to earn NFTs and bitcoin for physical activity. Move-to-earn apps are becoming increasingly popular, providing a fresh and exciting method for consumers to earn incentives while keeping active.

Predictions for 2023

The influx of new users on the major move-to-earn apps may have decreased, but this is also due to the winter season in the Northern environment. As spring approaches and people increase their activities, it is expected that growth will pick up again.

6. Mainstream Brand NFTs

Non-fungible tokens, or NFTs, have received a lot of interest in recent years as a new type of digital asset. They are one-of-a-kind things that cannot be swapped for comparable items. While NFTs were first popular in the arts, they have subsequently spread to other areas such as sports, music, and gaming.

Mainstream Brand NFT Forecast in 2023

Sports and brand Because of the overall expansion of Web3, NFTs are likely to continue their rising trend through 2023. This trend is anticipated to be driven by the increased acceptance of blockchain technology and the need for unique DeFi products as a source of income and a distinctive trademark.

7. Transparency

Historically, many cryptocurrency initiatives have been evasive regarding their operations, internal workings, funds, personnel, and collaborations. Recent instances, like those surrounding FTX, have heightened the crypto industry's emphasis on openness.

Will the transparency trend continue in 2023?

The downfall of FTX had some good consequences, including greater awareness in the cryptocurrency field. Governmental regulatory action, a loss of client trust, and capital outflows compelled centralized exchanges and other cryptocurrency ventures to become more open.
The inclusion of proof-of-reserves data was one of the first steps toward openness. Top research firms have also created tools to make tracking these indicators easier, making it more difficult for businesses to hide important information.

8. Market Consolidation (Acquisitions/Partnerships)

In a continuing bad market, industry titans buy smaller enterprises that struggle to survive. This is evident in the NFT industry, with Uniswap acquiring liquidity aggregator Genie and Open Sea acquiring Gem.xyz.
Partnerships between current projects are also being formed to weather the crypto winter together.

Will This Be the Case in 2023?

Partnerships and acquisitions can give projects access to new resources, technology, and user bases, allowing them to survive and prosper in the long run. Partnerships and acquisitions are likely to continue as the market consolidates.

9. Regulatory Compliance

Regulatory compliance is becoming increasingly important in bitcoin as governments around the world demand greater supervision and transparency.

In the United States of America

The recent FTX lawsuit has underlined the need for crypto projects to be prepared for increased regulatory scrutiny. Following the collapse of the cryptocurrency exchange, the chairman of the US Commodity Futures Trading Commission (CFTC), Rostin Behnam, has urged Congress to establish a legal framework for digital assets.

In Europe

The MiCA (Markets in Crypto-Assets) rule will go into effect in 2023. The European Parliament's Economic and Monetary Affairs Committee decisively approved the legislation on October 10, 2022, clearing the way for a vote by the entire European Parliament before the end of the year.

What Does 2023 Hold for Crypto Investors?

Web3 founders are anticipated to encounter increased governmental scrutiny and may need to obtain new licenses to operate in 2023. The 2022 crypto episodes prompted regulatory agencies around the world to take action, and this trend is predicted to continue.

Conclusion

Web3 is still the frontier where most crypto innovation is happening, but it’s also young enough that this year’s hot trend can look dated by next quarter — which is exactly why it’s worth revisiting a list like this regularly.